6 November 2002
PR147/02
Time for Government to get serious about Telecommunications

New telephone connection charges released by Telecom today are significant, and will do little to resolve the immediate problems being faced by those who currently cannot get a telephone connection, says Tom Lambie, President of Federated Farmers.

"High charges for connection are not new, said Mr Lambie. "Many rural New Zealanders already face prohibitive connection fees and have been relegated to the never-never land of Telecom's long wait list.

Telecom has scrapped its standard $61.88 connection (capital contribution) charge and replaced it with a tiered structure. Customers living in high-density areas (about 75% of the population) will pay a flat charge of $95, medium density areas will pay $250, and low-density areas will be charged on a case by case basis which could be thousands of dollars.

Mr Lambie said that while the new charging regime largely formalises what is already taking place in many rural areas, he expressed concern that many farmers could face significant cost increases while many others will still be denied access to a basic telephone service. "Comparing phone connection with gas connection is fallacious as both those phoning in and out obtain the benefit of a phone connection. Gas on the other hand gives an exclusive benefit

"This is a particular problem for rural families with small children, let alone those trying to attract staff many of who are not prepared to live in a house without basic telephone services. Lack of investment in the exchange infrastructure has created this problem.

"Given the isolation and sparse population of rural communities efficient and reliable telecommunication services are fundamental for basic health and safety, let alone for active participation in the knowledge economy.

"As a recent Working Paper prepared for the New Zealand Treasury by the New Zealand Institute of Economic Research (NZIER) shows New Zealand's comparative advantage lies in its rural exports despite moves taken to diversify the economy over the last two decades.

"It is time for the Government to get serious about universal supply through a network that provides both voice and data services," concluded Mr Lambie.

ENDS

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